IT COST commission says feds could save $5.8 billion on IT

A joint private-public commission, IT COST, recently offered 21 recommendations to improve transparency, reduce waste and increase the efficiency of IT spending within federal agencies.

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Page 2 of 2 What seems to be the biggest problem with federal IT spending?

Lavieri: In 2017, the known IT spending budget was $81.7 billion, with $55.9 billion devoted to operations and maintenance (O&M), compared to only $18.7 billion for development, modernization and enhancements (DME) across 10,500 data centers. It is obvious that with $55.9 billion committed to O&M, standardizing IT costing would position agencies to not only consolidate infrastructure and retire legacy technical debt, but also position them to take advantage of emerging IT services and sourcing models to drive an increase in transformation and innovation. What, if anything, does federal IT do well?

Lavieri: The quality of federal IT data is better than we often find in the private sector. This is attributed to the highly controlled environments that the federal agencies operate in combined with a strong set of processes and people managing various aspects of IT data. A case could be made that federal agencies have a better foundation around data that could be applied within the TBM taxonomy.

One of the bigger discoveries in working with various agencies is that they are very focused on planning, program management, people and the correct level of overall investments that are required in order to execute successful delivery of transformational initiatives (such as FITARA).   Instead of leaning in on technology to solve any and all inherent headwinds with FITARA compliance, they are putting a strong focus on program planning, process and governance early—and sometimes even ahead of—technology solutions in order to ensure overall transformational success, which is something that is often overlooked in the private sector. Which of the 21 recommendations do you think will have the greatest impact?

Lavieri: There are three (in order of priority) that we believe will have the biggest overall impact when implementing a TBM taxonomy to facilitate cost insights across the federal agencies.

First, agency CIOs should benchmark significant IT tower and sub-tower costs on an annual basis. With a focus on benchmarking at IT resource tower and sub-tower layers in the TBM taxonomy, IT unit costing is more practical in terms of making internal and external comparisons. This will position CIOs to use benchmark comparisons to drive conversations about the cost-effectiveness of their vendors, including public cloud services—the combination of which will then enable them to use comparisons to renegotiate vendor contracts to bring rates in line with peers. Second, federal agencies should adjust the financial reporting process to ensure IT spend can be identified from other spend. Third, agency CIOs should take specific steps to ensure better alignment of reporting between their offices, their offices of the CFO and the OMB. Is there a role for private sector IT service providers in helping federal agencies manage their IT spend more effectively?

Lavieri: During the final Report readout in Washington DC, James LaPlaine, CIO of AOL, stated “…this is our government too,” endorsing the concept that private sector practitioners should step forward in support of the federal government pursuing a TBM journey. According to the TBM Council, nearly 7,000 LinkedIn users have “TBM” or “Technology Business Management” in their titles, indicating that there is a wealth of information and resources available to federal agencies in the private market.

Tactically, the private sector will be crucial in assisting the federal government with TBM best practices and assisting in fulfilling FITARA requirements around achieving optimal vendor contracts and sourcing strategies. In addition, IT benchmarking guidance combined with the design, maintenance and operationalization of strong governance programs pertaining to people, process and program best practices will play a critical role in the support of federal agencies more effectively managing IT spending and service provider contracts.

Copyright © 2016 IDG Communications, Inc.

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